How Fashion Brands Can Turn Heads in a Crowded Market

by Rohan Ahire |

Fashion brands are facing interesting times. The explosion of private-label brands and online marketplaces have made differentiation more important than ever. The phasing out of third-party cookies and fragmented customer data make it difficult to truly know customer preferences and deliver the personalized experiences today’s consumers crave.

According to McKinsey, The State of Fashion 2021, fashion brands must optimize their channel mix while integrating the human touch. Consumers want to engage with brands in meaningful ways that go beyond purchases, and fashion is no exception.

A Look at the Fashion Landscape

Fashion brands typically fall under one of three segments—luxury brands, specialty brands, and fast fashion brands. Each of these has its own set of challenges.

Luxury brands are all about the experience, so the inability to sell in-store has forced them to find creative ways of translating the high-end experience online. While they know the top four or five percent of their customers really well, they know very little about the other 95 percent.

Specialty brands typically offer a group of collections that are often tied to lifestyle. Sports brands are considered specialty brands. Digital is especially difficult in this space as there’s a lot of competition. It’s all about differentiation and creating a lifestyle for your customers.

Fast Fashion brands have the added pressure to always keep the environment and sustainability in mind—as this is top of mind with their core customers. This includes using recycled fabric and other eco-friendly practices.

Learn more about how these three fashion segments can effectively weather the shift from physical to digital in this Market Movers interview with Maria Morais, Global Industry Principle at SAP.

What’s a Fashion Brand to Do?

Today’s consumers are demanding much more from brands than an easy checkout process. They want brands to know their preferences and lifestyle, care about the environment and, when it comes to fashion, be their personal stylist.

At the core, delivering experiences on this level requires timely, accurate customer data. For starters, good data will help fashion brands identify their best customers. Why is this important? Forbes reports that brands that have proven their value to their core customers will see spend per customer and LTV grow. Also, first-party customer data will enable fashion brands to get to know all their customers better, not just the top five percent, and they can use these insights to sharpen targeting across all touchpoints.

Women’s Wear Daily reports two key opportunity areas for fashion brands to innovate. The first is creating experiential ecommerce, and the second is harnessing our influencer culture. Fashion loyalty programs are one of the most effective ways of addressing all these strategic challenges.

Fashion Loyalty Programs Remove the Wrinkles

Consumers today have more places and ways to shop than ever. And they have increasingly shorter attention spans. An eMarketer study found only three percent of marketers claim to have all channels integrated to provide a cohesive, personalized experience.

Loyalty solutions not only help fashion brands improve their omnichannel strategy by enabling them to individualize interactions across the entire buyer’s journey, they help fashion brands accelerate growth through the following benefits:

  • Increase Customer Lifetime Value & Drive Growth—Increase AOV, frequency, and repeat purchase rate. Forbes reports repeat customers can increase sales by 47% and loyalty members spend up to 18% more.
  • Truly Understand Your Customer—No more personas. Robust first-party loyalty data gives you a unified 360-degree customer profile, so you really know who your customer is, what they’re purchasing, why they’re purchasing, and how often—wherever they shop. Loyalty’s mutual value exchange enables you to continue collecting customer data to help ensure right fit, style, and color.
  • Accelerate Growth without Discounting—First-party loyalty data enables value-based engagement that helps you stand out from the pack.
  • New Cost-effective Acquisition—Gain new customers through advocates, referrals, and influencers.
  • Reduce Churn & Build Emotional Bonds—Deliver benefits customers can’t find anywhere else, like exclusivity, early access, and belonging to a tribe. Create meaningful engagement beyond ‘if you’re buying this, why not add that’. Add value between purchases by rewarding desired behaviors and actions.

Examples of Fashion Brand Customer Loyalty Rewards

Selling handbags and shoes isn’t enough to satisfy today’s fashion consumers. Loyalty fashion programs are a great way to recognize and reward customers beyond points and transactions.

Here are a few examples of ways fashion brands can reward customers to elevate the customer experience and build customer loyalty:

  • Offering virtual styling assistants to loyal customers as a value-add service (e.g., hiring real people to customize shoppers’ wardrobes online) has been proven to increase retention and margins
  • Reward members for sharing on social media or participating in Instagram contests
  • Combining exclusivity and anticipation with flash sales—Talbots and Evy’s Tree do this regularly, offering exclusive collections and early access to loyalty members
  • Reward members for bringing back old clothes or wearing clothing with smart tags
  • Alert members when items they want go on sale
  • Members-only VIP events
  • Percentage of purchases donated to a local charity of their choice

Try these Real-life Fashion Examples on for Size

The NikePlus program now includes free expedited shipping and experiential in-store rewards for members, and exclusive member rewards that include personalized access to limited edition collections based on the training activities they prefer. Members-only sales, promotions, in-store events, and services ensure loyalty members enjoy curated experiences and exclusive benefits.

H&M’s brand has deep roots in sustainability. In addition to offering points for shopping, rating and reviews, and updating profiles, the brand offers “Conscious Point” for recycling old clothes or bringing your own shopping bag to the store. These points turn into bonus vouchers redeemable for the next purchase. Their Plus Member tier offers early access to events, surprise offers on birthdays and other special occasions, and exclusive access to unique collections.

The North Face has shifted to creating more experiential interactions between their brand and their customers. In addition to earning points for purchases, members can earn points for visiting specific points in national parks. Other perks include providing feedback on unreleased designs and first access to buy new products. They also send out surprise gift cards to members talking about The North Face on social media.

Annex Cloud Knows Loyalty

Annex Cloud’s Loyalty Experience Platform™ combines best-in-class loyalty management with powerful engagement and communication modules, enabling grocery and supermarket retailers to build lasting customer bonds while accelerating growth. It’s modular, so you buy just what you need. Learn more about our fashion loyalty programs.

[White Paper]
[White Paper]